School debt can be significant in primary care

Financial security in the face of rising debt for medical school is important when a resident decides on a specialty — and a new study shows just how much a career in primary care is at a disadvantage.

Researchers at Dartmouth Medical School developed a financial model that compared net income to expenses, taking into account best, average, and worst expense scenarios.

“Many students graduate with more than $200,000 in medical school debt and if you factor this into an expense model plan, a career in primary care is financially challenging,” says Martin Palmeri, MD, MBA, a fellow and instructor in the department of hematology/oncology at Dartmouth Medical School.

“If you’re a medical student trying to figure out a career, you will soon see that primary care will not make ends meet, at least for the first couple of years of practice,” he says. “After three or four years in practice, primary care providers will eventually meet their financial goals. A physician with an average primary care salary coupled with average expenses would be solvent after two years and on the way to saving. But if the physician had high expenses [i.e., over $200,000 in medical school debt], it could take as much as seven years.” Palmeri says the average starting salary for a primary care physician (including family medicine, pediatrics, and internal medicine) is $130,000. For the model, he assumed an average income tax rate of 25 percent. This results in an after-tax monthly income of $8,125.

Three scenarios using high, average, and low expenses

Cash flow gap between after-tax earnings and life expenses such as educational loan repayment, retirement savings, home expenses, and child college savings